Harsh Realities of Pay Equity Implementation

We continue to be committed to the pay equity settlement, but its speedy turnaround from announcement of the rates in mid-May to implementation on 1 July has some harsh realities for many.

For those residents and their families who pay privately for care, that reality is an increase in their annual fees to the tune of up to $4500 – an outcome we pointed out earlier to Government but regret that it has remained unfunded.

The Government chose not to fund these 25% or so of residents who are ‘private payers’ because they do not meet the Government’s asset and income criteria for fully subsided ‘rest home’ level care.

It is even more regretful that our members have faced the difficult task of advising affected residents of the fee increases. We had asked that the Government take on this task. However, we had no such confirmation by 1 June when our members were obliged contractually to advise residents of fee increases. Now we are bearing the brunt of frustrated residents and family members.

The reality of the funding mechanism and its urgent implementation is leaving many members in jeopardy - having had little time to adjust their business models. The actual funding will fall short of the Government’s long stated intention to ‘fully fund’ the settlement.

Those mostly affected are smaller rest homes, often in rural areas, as well as those run by welfare, trusts or religious based organisations. In the past few weeks, we have been contacted by more than 100 members saying they’ll be financially disadvantaged and be forced to make staff redundant or cut back hours – surely the opposite intended outcome of the settlement.

Others face closure as in the case of one rest home in the Waikato. Whilst another facility in Taranaki and one in Wellington are considering closure now that they have assessed the details of the settlement.

Yet another provider, this time a 26-bed rest home in a regional town, known for its innovation in dementia care, is sadly too weighing up closure as an option.

The pending closures, reduction in staff hours and redundancies will hurt smaller communities and rural areas where rest homes provide sustainable and meaningful employment for people that might not otherwise have jobs.

And, from a resident perspective, it will reduce options for care and force some of our older and vulnerable citizens to move outside their communities and away from their friends and families to find suitable rest home care.

We need to work with Government to ensure providers are supported in adjusting to the new environment with transitional support.

If Government wants to see aged residential care being provided in our smaller regional and rural communities, then they have an obligation to support transitional funding in this settlement.